Markets Brace for Rate Cuts as Inflation Data Take Center Stage

Global markets are eagerly anticipating the end of August and the start of a Federal Reserve easing cycle. Asian shares show solid performance, while the US dollar faces its worst month since November. All eyes are on forthcoming inflation data from Europe and the US that could influence future rate cuts.

Global markets are set for a potentially transformative September as investors wrap up August with heightened anticipation. Asian stocks exhibited strong performances on Friday, while the U.S. dollar struggled through its worst month since last November. Policymakers at the Federal Reserve appear to be ready to commence a long-awaited easing cycle, with a rate cut expected on September 18.

European markets are set for a busy final trading day in August, featuring key economic reports from the UK, Germany, and France. Investors will focus on inflation, unemployment, and retail sales data, which could give critical insights into the next moves by the European Central Bank (ECB). Thursday's preliminary data from Germany indicated a larger-than-expected drop in inflation, potentially signaling a broader trend for the Eurozone.

Meanwhile, U.S. markets keenly await the release of the core personal consumption expenditures (PCE) price index, the Federal Reserve's preferred measure of inflation. With nonfarm payrolls data on the horizon, the Fed's strategy for rate adjustments will become clearer, driven by labor market conditions and overall economic health.

(With inputs from agencies.)